May 12, 2021

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Board releases a new fiscal plan for the UPR

The Oversight Board certified a fiscal plan for the University of Puerto Rico (UPR) that freezes for one-year increases in tuition fees for students but insists on changes at the management level that the UPR administration has resisted for years.

The document, which was published yesterday although it is dated June 12, orders the state university to eliminate the employees’ Christmas bonus, reduce medical insurance employer contribution for faculty and non-faculty employees, and begin a plan to eliminate 10,300 positions by 2025. It also urges the institution to consolidate administrative operations in the 11 campuses, such as those carried out by the offices of Human Resources, Finance, and Procurement, among others.

“The 2020 UPR Fiscal Plan contemplates eleven measures: seven revenue enhancing measures that, if properly executed, can collectively increase UPR receipts by approximately $160 million per year by FY2025 and four expenditure reducing measures, including pension system reforms, that can drive savings of approximately $225 million per year by FY2025,” the Board stated in the document.

The fiscal entity estimates that the measures included in the certified plan would generate an operational surplus of $300 million for the university system by fiscal year 2025. Despite these measures, the Board questions the capacity of the UPR to comply with debt obligations, which total around $600 million, if not subject to a restructuring process.

UPR President Jorge Haddock Acevedo did not comment yesterday on the document, as he was still evaluating it, according to special assistant Joan Hernández.

However, measures such as the elimination of the Christmas bonus and the lay-offs have been rejected by Haddock Acevedo and the UPR Governing Board in previous years.

The new Fiscal Plan considers the impact of the coronavirus pandemic on the UPR. The university administration estimated the losses from COVID-19 at $54.6 million, the largest item due to revenue they did not receive as a result of the Gambling Act.

“UPR will undoubtedly play an essential role in Puerto Rico’s recovery, teaching students best prepared to create a Puerto Rico of opportunity and prosperity. However, UPR needs to be prepared for the challenges ahead,” Board Executive Director Natalie Jaresko said in a press release.

As it was already established in the central government’s Certified Fiscal Plan, the contribution the UPR receives directly from the General Fund will remain at $501 million next fiscal year. This way, the $71 million cuts established in previous fiscal plans will not be implemented.

This freeze comes along postponing for one year increases in tuition and fees for undergraduate and graduate students. However, the increase in the cost of credits will return in the fiscal year 2021-2022, so that undergraduates credit will reach $157 in 2023.

“The year’s delay granted by the Oversight Board affords the UPR an opportunity to review carefully its finances and operations, engage trustees, alumni, administrators, faculty, students and staff on its campuses in extensive discussions about the future of the University, and finally put into the motion the major operating model changes that will allow it to achieve the financial targets set for the period from 2020 to 2025,” said the Board.

The UPR’s Certified Fiscal Plan does not mention lab schools or the proposal, the Governing Board approved in March to increase tuition to $3,500 annually for its students.

The president of the Brotherhood of Non-Teaching Employees (Heend, Spanish acronym), Jannell Santana Andino, noted that the Board’s Certified Fiscal Plan is similar to fiscal plans developed by the university administration, particularly, one that the Governing Board did not approve last month due to opposition from students and faculty representatives.

Santana Andino said that most of the savings impact on the UPR administrative operation, without considering the direct impact they will have on the academic and research functions. For example, she pointed out that when they mention a 5 percent reduction of non-teaching employees or 10 percent of administrative employees, that does not take into account that researchers depend on laboratory technicians who are not teachers.

“The ignorance regarding how the UPR operates is such that they don’t know that there is a symbiotic relationship between the administration, the academy, and research,” Santana Andino said.

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